Rising from the political turmoil of the 2014 military coup, Thailand has emerged as Southeast Asia’s blockchain hub, spurred on by a government that has led by example.
In 2018, lawmakers passed the Royal Decree on Digital Asset Businesses, signaling to other stakeholders in the blockchain and crypto-space that there is considerable political will to advance the cause of blockchain and cryptocurrency adoption in the country.
Now, Thailand is a hotbed for blockchain entrepreneurship, home to 26 blockchain startups as of the beginning of 2019, and it is estimated that 10% of Thais own some form of cryptocurrency — the second-highest crypto ownership rate in the world, second only to South Africa’s 10.7%.
The popularity of cryptocurrency among Thais has generated interest from digital asset exchange operators to enter the local market. As of October 2019, Zipmex has been actively engaging with regulatory authorities to obtain a license for its digital asset exchange services. The Singapore-based firm provides a secure platform for both retail and institutional investors to invest in cryptocurrencies through the use of advanced tools to offer fast trading times in addition to a high level of liquidity through access to a wide range of cryptocurrencies.
The government itself has used blockchain in various areas of public administration, as part of its Thailand 4.0 development agenda.
The use of blockchain by the Thai government dates back to August 2017, when the State Railway of Thailand (SRT) and Thailand Post announced that they would start using blockchain in railway management and postal services, respectively. At the SRT, blockchain is being used in the development of a dedicated communications system to increase the accuracy of its railway itinerary. Thailand Post, on the other hand, is turning to blockchain to enhance the security of high-value parcels shipped through its logistics network.
In addition to transportation and logistics, blockchain has also been used to strengthen the democractic process in Thailand. In January 2019, the Thailand’s National Electronics and Computer Technology Center (NECTEC), an office of the Ministry of Science and Technology, announced that it has completed the development of a blockchain-based voting system, though further testing is required for large-scale implementation. Given that blockchain systems are decentralized and therefore immutable, its use in national polls and elections would further strengthen the integrity and legitimacy of election results.
Given the sensitive information involved in voting as well as other governmental transactions and processes, the development of a national digital identity platform in Thailand would complement the use of blockchain-based electronic voting in the country. The Electronic Transactions Development Agency (ETDA), a unit of the Ministry of Digital Economy and Society, had in November 2019 embarked on the Digital ID Project to develop a nationwide digital identification platform. Leveraging the infrastructure of National Digital ID Company Limited (NDID), the ETDA aims to use blockchain-based timestamping to authenticate and verify the digital identities of Thai citizens.
The Thai government has much more in store for distributed ledger technology. Given the centrality of agriculture to Thai society, it is unsurprising that the Trade Policy and Strategy Office (TPSO) is exploring the use of blockchain for the industry. In November 2019, the TPSO announced that it is embarking on a pilot to use blockchain for tracking agricultural produce and monitoring the quality of exports.
Meanwhile, Thailand’s Ministry of Finance had in November 2019 announced three blockchain projects for the issuance of value-added tax (VAT) refunds on purchases by foreign tourists, government procurement, and the issuance of scripless savings bonds.
For VAT refunds, the Revenue Department, Customs Department, and Krung Thai Bank are currently in the process of developing a blockchain-based mobile application to handle VAT refund applications, which would tackle the issue of fraud in the tourist scheme and reduce paper-based documentation. For government procurement, the Ministry of Finance will be using blockchain-based guarantees to reduce the need for collateral checks on its suppliers, streamlining the procurement process. As for scripless savings bonds, the Ministry’s Public Debt Management Office will use blockchain to reduce issuance times and make scripless savings bonds more accessible to the public.
Thailand has come a long way from its agrarian roots, now grappling with the Fourth Industrial Revolution. As the country forges ahead on its Thailand 4.0 development agenda, firm government commitment and support for blockchain, coupled with the popularity of cryptocurrencies among Thais, may well transform the Land of Smiles into the Land of Blockchain.
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